Nvidia's Earnings Loom Large: Will Chipmaker's Report Shake Up Wall Street?
1min read As Nvidia prepares to announce its quarterly earnings this Wednesday, the spotlight of Wall Street turns once again towards the influential chipmaker. Analysts from Bank of America Global Research, led by Gonzalo Asis, emphasize that Nvidia’s earnings could profoundly impact the trajectory of the U.S. stock market, as the company has consistently been a strong driver of equity returns.
Throughout the past year, Nvidia has been a dominant player in the U.S. equities landscape, contributing approximately 20% to the S&P 500’s profits. Bank of America analysts project that Nvidia could further enhance the index’s earnings per share by nearly 25% in the upcoming third quarter. This potential influence underscores the importance of Nvidia's performance to Wall Street investors, amid other economic data releases and Federal Reserve meetings.
The options market is already signaling the weight of Nvidia's earnings, suggesting a larger market risk attached to its performance compared to other upcoming financial events like the nonfarm payroll report or consumer price index figures. This could indicate heightened volatility in the S&P 500, closely aligned with Nvidia’s own market fluctuations, as investors prepare for the company's financial revelations.
Nvidia, the last of the major “Tech Seven,” to release its quarterly results, is sectioned off as a market bellwether by analysts at FactSet, with expected quarterly sales reaching $33.1 billion, reflecting a 10% increase from the previous quarter and an impressive 83% surge from a year prior.
However, Nvidia faces challenges beyond the earnings report. Technical setbacks with its newest Blackwell AI chips could pose unintended risks. These chips are reported to be experiencing severe overheating issues within high-capacity server racks, causing potential delays in the deployment of data center processors. Such technical issues have led Nvidia to make adjustments to the design, which could impact GPU performance and risk hardware damage.
This series of delays, beginning with Nvidia's March introduction of the Blackwell series, has postponed delivery expectations from the second quarter this year to the end of January next year. Despite these hurdles, Nvidia's market influence remains undisputed, as investors eagerly anticipate its financial report for direction on both the company's future and the broader U.S. equities market.